Aerial view of drought-plagued grazing land in New South Wales, Australia. Graziers are desperate for rain after a hot October 2014. Photo: ABC News

By Chris Uhlmann
5 November 2014

(ABC News) – CHRIS UHLMANN: It's being described as a once in a 100 year drought. Parts of New South Wales and large swaths of western Queensland and Victoria have chalked up the lowest rainfall on record over the past two years.

The Abbot Government is preparing to re-allocate $100 million in low interest loans to farmers in the worst affected areas.

Brent Finlay is the president of the National Farmers' Federation and he joins me now from Darwin.

Good morning.

BRENT FINLAY: Good morning, Chris.

CHRIS UHLMANN: Brent Finlay, can you give us a sense of where the drought is biting and how farmers are faring?

BRENT FINLAY: Certainly. The western districts of Victoria are, they're rapidly sliding into drought. But northern New South Wales and over 75 per cent of Queensland is in drought and has been in drought for three years, approaching the fourth year.

CHRIS UHLMANN: Are people leaving farms?

BRENT FINLAY: Oh, certainly. And we're starting to see communities starting to collapse.

Now I've done a number of tours through western Queensland, northern New South Wales, and no, it's tough out there. It's certainly tough on the people that are there.

CHRIS UHLMANN: And how are the private banks treating people at the moment? We've heard complaints in the past.

BRENT FINLAY: Well, we had a debt summit in Canberra a month ago and there was discussions around that and certainly around banks approaching drought-stricken farmers, and also talking about a national debt mediation process so we actually have some checks and balances around when unfortunately our businesses get into trouble.

CHRIS UHLMANN: Now the Federal Government says that no decision has been made yet on extending low interest loans. Are you expecting it?

BRENT FINLAY: Well, no, I'm only seeing what's in the media and there's been no official announcement about it. We welcome the reallocation of funds, if that's what happens. These are loans and they're loans that have to be paid back.

CHRIS UHLMANN: What kind of interest rates and terms are you talking about with these loans?

BRENT FINLAY: Well what we're seeing in the media is interest rates of around 3 per cent and, no, certainly, that is cheap, affordable money for a lot of people that probably haven't taken part in any of the schemes up to date.

CHRIS UHLMANN: And what would the loans be used for?

BRENT FINLAY: Well it's certainly- it's restocking when it does rain. And right at the moment it's hard to do anything. What we obviously need is rain and a lot of rain. But it's restocking and it's replanting crops and getting these businesses back on their feet.

CHRIS UHLMANN: Isn't this just propping up, though, businesses that are marginal? If the Government doesn't do it for workers in the manufacturing industries, why should it support farmers?

BRENT FINLAY: I think in your intro you were talking about a one in 50, or one in 100 year drought. And before this drought, these businesses were strong, they were viable. And when it rains they will be again.

CHRIS UHLMANN: Will they be again or are you expecting that over time, with climate change, you might see less rain in these areas, they become ever more marginal?

BRENT FINLAY: Well climate change and discussions around that are obviously at the forefront of everybody's mind. Farmers, we adjust to the climate we see every day. And we read all the predictions and adjust our production systems accordingly. [more]

Farmers in three Australian states experience lowest rainfall on record

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